Appendix B: Bank Case Study

Situation

ABC Bank, a leading bank with a presence in over 10 countries and a focus on corporate, commercial, and retail banking segments, wanted to have its revised strategy articulated, reflecting the new objectives that the bank was looking to achieve. This was motivated both by changes in the market environment and also the expanded reach of the bank in new emerging markets.

Significant opportunity in the marketplace was driven by a large infrastructure and real-estate boom in the home country of the bank, which supported increased penetration opportunities in the retail and wealth-management sector. The home country of the bank also had one of the highest per capita gross domestic products (GDPs), $74,000, with a population growth that was more than 15 percent per annum. The overall market conditions were also quite favorable to the banking industry, with an average return on assets (ROA) of 2.5 percent, one of the highest globally at that point in time.

However, considering that this was a few years after the 2008 global crisis, banks were generally quite skeptical about lending, since the scars of the downturn left bankers feeling risk averse. While the non-performing loan (NPL) rates in neighboring countries were operating above 7 percent, the home country of the bank was still lower than 3 percent, making it an attractive market to lend and creating a very conducive environment for growth.

Not surprisingly, the overall market was becoming ...

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